FFI Standard for Consumer (B2C) Companies

A Consumer (B2C) company serves individuals rather than organisations. Revenue is generated through direct‑to‑consumer sales, consumer subscriptions, in‑application purchases, advertising, or other models in which the purchasing decision is made by an individual. The defining financial characteristics are high transaction volume relative to average transaction value, and unit economics that are sensitive to user acquisition efficiency, engagement rates, and individual retention behaviour. The unit is typically the active user, and the correct definition of the unit is the first financial decision the company must make (Book 0, Section 0.6).

Consumer companies must document which monetisation model their lifetime value calculation reflects. LTV to CAC benchmarks for advertising‑monetised, in‑app purchase, and subscription consumer companies are distinct and cannot be applied interchangeably (Book 2, Section 2.2).

For advertising‑monetised businesses, the unit is the active user and the primary revenue metric is average revenue per active user. For subscription consumer businesses, the unit economics closely resemble those of Recurring Revenue companies, with emphasis on individual retention rates and churn. For in‑app purchase businesses, cost of goods sold must account for app store fees, which are a variable cost deducted before gross profit is calculated (Book 2, Section 2.5).

Consumer companies whose primary growth mechanism is product‑led or marketing‑led must use a user acquisition model in place of a sales capacity model. The growth model derives projected active user counts from acquisition channel performance metrics, observed activation rates, and observed thirty‑day and ninety‑day retention rates (Book 2, Section 2.4).

The KPI framework for a Consumer company must include daily or monthly active users (depending on engagement frequency), day seven and day thirty retention rates, average revenue per active user, user acquisition cost by channel, and cash runway (Book 6, Section 6.4). The North Star Metric is typically the operational outcome that drives long‑term financial success, such as the frequency and depth of user engagement that predicts lifetime value (Book 6, Section 6.4).

Valuation multiples for Consumer companies are highly variable and depend on monetisation model. Advertising‑monetised businesses are commonly valued on revenue or EBITDA multiples rather than ARR multiples. Consumer subscription businesses are valued similarly to Recurring Revenue companies. In‑app purchase businesses must reflect app store economics in their margin structure, which affects the applicable multiple (Book 4, Section 4.3).